Buying A House With An Attached Apartment: An Eco-nomical Housing Solution

Interest rates are great, house prices are low, and the market is packed with great deals. So how can you find a cost-friendly, eco-friendly home without breaking the bank?

Consider purchasing a home with an attached apartment. I know this may not seem green or cost effective, but it is both!

If you keep your square footage relatively low, the attached apartment will improve the urban density in your home. A huge portion of your carbon footprint is just the square footage you occupy in your living space. Here’s an example: Our home is about 1,000 square feet with an additional 300+ square feet in a studio apartment. Since we add another person to our living space with that apartment, each of the five people living on the property occupies less than three hundred square feet apiece. That’s not bad considering that the average family of four lives in a home over 2,000 square feet.

In addition, the apartment rental price generates more than half of our monthly mortgage payment. In fact, we have never in all of our lives, paid so little for housing, even during our years in a tiny five hundred square foot university apartment.

We also get tax benefits which help us write off the depreciation of the rental unit, making the rental income come with a very small tax burden.

Does this sound super fantastic, but a little scary when you think about becoming a landlord? The great news is that several communities have a rental owner association that can help get you started with forms and workshops. It’s really quite worth the trouble.

In our case, we remodeled a very strange three hundred square foot addition that wasn’t complete when we moved in. In the last six years the apartment has paid back all the remodeling costs and now generates income. Between tenants we sometimes keep the rental open in the summer to use as a guest house for visiting family members.

Another thing to think about is that as our fixed mortgage eventually gets paid off, rents can keep going up. Theoretically we could stay in our house until we pay off the mortgage, and then charge whatever the going rental rates are. In 20 years we would be making money instead of spending money on living expenses.  So even though our house is very small and we all share one bathroom, I am grateful that it is so very eco-nomical!


  1. I agree — a great investment. However, I dislike the idea of being a landlord. A lot. On the other hand, you could use the apt. as a mother-in-law for your parents if necessary.

  2. Just about everyone does this where I live. Most houses are built with suites in the basements. It’s the only way to afford a house because housing prices are NOT low here. Unfortunately, at nearly $700,000 for a house with a basement suite even the income we could generate from being landlords wouldn’t be enough to help us buy. Ahh, homeowner dreams…

  3. Betsy, I have the same thoughts about being a landlord. However, a couple of my friends have separate apartments and rent them out to their friends or family. That might make things easier in some ways. But on the other hand . . . at least with a stranger, you wouldn’t have to feel too bad if the arrangement didn’t work out. It might be kind of hard to kick your mom to the curb if she stayed up all night throwing wild parties or something.

  4. This is the only way we can afford to live where we do. I love the extra income, and we have had some very cool tenants, but I really dislike being a landlord at times.

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